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Commission prepares two options for hiking taxes


A special tax commission set up by the government outlined two proposals on Friday for hiking taxes to pay for reconstruction efforts in areas devastated by the March 11 disaster. The total amount of tax increases would generate 11 trillion yen.

At the outset, the commission considered a consumption tax increase, but Prime Minister Yoshihiko Noda asked for that not to be considered at this time, NHK reported.

The first option calls for delaying a previously proposed 5% corporate tax reduction for three years, and raising income tax by 5.5% for 10 years, or 11% for five years. The second option also recommends shelving the 5% corporate tax reduction for three years, but the income tax hike would be 4% along with tobacco tax increase of 2 yen per cigarette.

NHK reported that residential taxes are likely to be increased by 10,000 yen as well.

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that much hike may or may not help in reconstruction of Tohoku region BUT it will definitely hurt the economy of rest of Japan.

3 ( +4 / -1 )

I think to solve this whole problem, Japan should hike the tobacco price to 1500 yen per pack. That alone would generate a whole lot of money.

2 ( +4 / -2 )

Elderly people on fixed income better start getting used to the taste of cat food. Why can't these idiots understand? It is insane to tax food and rents.

4 ( +5 / -1 )

it will hurt the economy - i know because it hurts me and my family and my friends...........wont be spending money we dont have.

4 ( +5 / -1 )

Even a 4% hike would hit low earners hard, yet be nothing for high earners. Any increase in income tax should be proportional, not a flat tax.

0 ( +1 / -1 )

Bend over and grab your ankles folks. At least five years, and probably longer, of paying higher taxes to a woefully inefficient government. On top of the ludicrously high current rates -- like 40% for companies. Glad I got out.

0 ( +2 / -2 )

The prices of most of products have been dreasing due to the appriciation of yen. thus raising cumsumption tax does not hurt people so much. but poiliticians are reluctant to raising the tax without founded reasons.

-4 ( +0 / -4 )

BY 11% or TO 11%? In the case of the former, the rate would hit 16%!

0 ( +0 / -0 )

I wouldn't mind if the money was spent well, like relocating the capital to Osaka. Rebuilding in an area that continues to have earthquakes and and an out of control nuke is like trying put out a fire with gasoline...

-2 ( +0 / -2 )

better tax also the politicians so that they an feel the same pain

2 ( +3 / -1 )

They need to raise the taxes on the Yaks, tobacco products, Tepco and its employees, pachinkos, and all the adult entertainment places in Japan first. Oyeah with all the money Ozawa has,l that M.F. could fix his own home town in Iwate himself.

BTW many Japanese are leaving this country for Thailand, becuse they knew they would be hit with the clean up/rebuilding cost for the blunders their leaders failed to plan for and all the hidden and censored corruption-btw this was Japanese telling me this, so I guess Ishihara pronounced them non-jn's

-2 ( +1 / -3 )

Does anyone actually believe that the gov't would lower taxes after the 5 or 10 year period?

0 ( +1 / -1 )

So residential tax will go up 10000 regardless? Love how that is thrown in there. I for one do not understand where this money goes? Last time I checked I do all my own recycling and garbage sorting, cleaning my community, and get nothing but grief from the local Yakuba. And lower corporate taxes? Well, a no-brainer. But, this is only delaying the eventual departure from Japan for most businesses - it might even speed it up in some cases where companies can raise capital faster to get out. Penalizing the country and honest working people is not fair to rebuild those areas. What is the benefit for someone in Kyushu? Or rural Toyama?

1 ( +2 / -1 )

Why did he ask for the consumption tax not to be increased at this time??????? Maybe,save the increase of consumption tax for later to sort out the welfare system?? But those proposed tax increases are the final nail in the coffin for the growth of Japan. What a huge disappointment for the people of japan,the japanese political system has let them down once again.

1 ( +1 / -0 )

They will raise the consumption tax when they are in absolute dire need of money, which is not where we are yet. Any consumption tax raise is permanent.

1 ( +1 / -0 )

Personally, I would rather see the consumption tax hiked rather than my income tax or ward tax. Those two tax hikes reduce the amount of disposable income we can spend.

At least with the consumption tax, I can choose to purchase more or less. It's also the only tax with no loopholes. Even crooks and politicians have to pay it.

2 ( +3 / -1 )

@swingaway. Yes I believe the govt will reduce the tax. Reduce the tax of CEOs that is...

-5 ( +0 / -5 )

Err, just let the Bank of Japan buy another 18 trillion yen of government bonds, which they usually buy up to 30 trillion yen every year. So why not this year too? It increases the quantity of yen relative to the U.S. dollar and will help depreciate the strong yen these days. And sell off government assets and abolish quasi government corporate bodies aka Doppo that consumes 12 trillion yen of revenue annually without doing so meaningful and efficient job. Also they may use the foreign reserve which is a de fact tribute to the empire. Many ways to reconstruct Tohoku without raising taxes.

0 ( +1 / -1 )

jforce: I'm with you. The residence tax is not only meaningless, but infuriating. I have a friend who works in the local city office and I was asking him about the residence tax and what it covers. He said that on top of things like garbage collection and public works, it covers maintenance of public structures, construction of new facilities for the public, cleaning, etc. However, all of these things are usually covered in other taxes in other nations (ex. income tax), and on top of that, aside from garbage collection most of the stuff is useless. The construction is usually just 20 people digging up a three meter section of road then paving over it again, bid-rigging for 'youth centers' which no one uses (and if you do use it you have to rent out the room), and everyone has to gather in their neighbourhood at least twice a year for the 'local cleaning', which the city does not do (or if you live in an apartment building you pay a 'kani-kin' fee for keeping the area clean).

Residence tax is just a cash grab.

0 ( +2 / -2 )

I already pay a fortune in residential tax, but that I can handle. What I don't understand is NOT lowering corporate tax. That should be first on their list. Delaying lowering it 5% for 3 years is not the way to go.

0 ( +2 / -2 )

I have troted this out many times but to raise serious amounts of YEN for Tohoku as the govt has to do is cut ALL ministries budgets by 10-15%, use that for Tohoku, money WE have are already paying.

ALL ministries waste/steal 10-15% EASILY so they can all EASILY afford this & they shud bloddy well do it, the 80s were 30yrs ago for christs sake!

1 ( +2 / -1 )

At least with the consumption tax, I can choose to purchase more or less. It's also the only tax with no loopholes. Even crooks and politicians have to pay it.

Not quite, a lot of small shops that collect the 5% KEEP IT for themselves if their income doesnt exceed a certain amount, I think its 8 or 10million yen

0 ( +0 / -0 )

When I first saw the headlline, I thought they were going to propose a tax on "hiking". (lol)

1 ( +1 / -0 )

There is no such thing as a temporary increase in tax. The extra tax on petrol was supposed to be temporary, it's been in place for about 40 years now.

An increase in tax will kill the economy and lead to a decrease in revenue.

4 ( +4 / -0 )

All this BS will change next week or 2wks from now, I have been hearing about the consumption tax going up for the whole 20yrs here, only once it jump 3 to 5%, mostly these IDIOTS just talk crap & do zip 99.999999999% of the time!

0 ( +0 / -0 )

Wondering what effect this would have on the yen to dollar rate.

0 ( +0 / -0 )

Having driven (very slowly) up Yamate Dori today, may I humbly suggest the following

Firstly, take an inventory of all the pulic works going on today

Secondly, PRIORITISE!! If you add up all the approved projects going on today, cancel some of the "nice to have" and put the resouces into Tohoku instead.

Do not increase tax rates otherwise we will be in deflation for the next millenium and beyond.

1 ( +1 / -0 )


" Wondering what effect this would have on the yen to dollar rate. "

None. The dollar has its own set of problems, and with Obamanomics in place will continue drop. Except in case of an international crisis like a war, in which case the dollar inevitably picks up again as a "safe haven " currency.

Tax increases in Japan are irrelevant in both cases.

-1 ( +0 / -1 )

Toally agree with Smartacus. During this dithering over consumption tax, my juminzei and national health have been going through the roof, even though I live in one of only about two cities in Hokkaido with a growing tax base from positive population growth.

1 ( +1 / -0 )

Nessie, the government is taxing more where the money is. Naturally.

0 ( +0 / -0 )

Anyone that wants to be a politician should automatically not receive an income. Problem solved.

0 ( +1 / -1 )

I will never forget back in 95 or 96 when the economy was starting to show real signs of recovery and I think it was Hashimoto Ryutaro and the LDP who introduced the 3% consumption tax - killed personal spending almost over night. Though it was interesting to see people stocking up on all sorts of things the week before the tax was to increase. Was day and night just like that! More or less, the "lost decade" was given new life in that one move and it's 2011 and we are still stuck in a quagmire of deflation, wasteful spending, and rising deficits in Japan.

Raising taxes, as they have been doing over the past few years, is exactly what they shouldn't be doing IMHO! In a way, these policies are encouraging me (and many others in Japan) to save what I can and wait to do all my serious shopping when I leave the country with all the power of the "super yen". So, I spend money on the bare essentials, hurting the local economy, and help shops in other countries - kind of ironic, no?

0 ( +0 / -0 )

alladinSep. 17, 2011 - 08:10AM JST

Japan should hike the tobacco price to 1500 yen per pack

just make it 15,000 yen a pack, and cut the consumption tax to zero, that will increase spending on things people really need :)

-1 ( +0 / -1 )

Thank you for your post WilliB.

Tax increases in Japan are irrelevant in both cases

It's hard to see how taxes will not affect the Japanese economy in some way, and how that effect would not be reflected in some way in exchange rates.

0 ( +0 / -0 )

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